Study examines financial vulnerability of older New Zealanders
Associate Professor Helen Roberts.
A new study from the University of Otago has examined the financial vulnerability of older New Zealanders, with findings showing that Maori, Pacific Islanders and women have lower levels of financial literacy, making them financially under-prepared for their retirement years.
The research complements the report based on a 2020 New Zealand Financial Services Council survey that identifies negative outcomes related to lack of financial preparation, including poor mental health, relationship dynamics, physical health and well-being. be general.
The University of Otago study, “Financial Literacy, Debt, Risk Tolerance and Retirement Preparation: Evidence from New Zealand,” found that people with better education were more financially literate and were more likely to have less anxiety about debt and a higher tolerance for risk.
The study supported previous research which found that financial literacy is high in New Zealand, with 57% of older New Zealanders performing well on the tests in this study. However, women aged 55 to 59 and people of Maori or Pacific Islander ethnicity with lower education, lower incomes, and high family responsibilities had significantly lower levels of financial literacy and were more vulnerable. to financial difficulties during their old age.
Associate Professor Ros Whiting.
“For many people, lack of financial literacy prevents them from making positive financial decisions during their working years, resulting in more difficult living conditions in their later years,” says the author, professor Associate Helen Roberts of the Accounting and Finance Department at Otago Business School.
“Overall, our results suggest that financial literacy is important for retirement preparation and in contrast to previous research which has suggested that there is in fact no correlation between financial literacy and retirement planning. retirement in New Zealand, ”adds co-author Associate Professor Ros Whiting, also from Otago Business School.
Co-author Dr Jelita Noviarini noted how, like the COVID-19 situation, those who suffer most financially in retirement tend to have lower incomes and more anxiety about their level. debt. Providing better financial literacy can help improve financial health and general well-being through positive decision-making about retirement planning, savings plans, and investments.
Jelita Noviarinia, Andrew Coleman, Helen Roberts, Rosalind H. Whiting
Pacific Basin Finance Journal